Chapter 7
Implementing Strategies: Management &
Operations Issues
Strategic Management:
Concepts & Cases
13th Edition
Global Edition
Fred David
Ch 7 -1
Ch 7 -2
Strategy Formulation vs.
Implementation
Strategy Formulation Strategy Implementation
n Positioning forces n Managing forces during
before the action the action
n Focus on effectiveness n Focus on efficiency
n Primarily intellectual n Primarily operational
n Requires good intuitive n Requires special
and analytical skills motivation and
leadership skills
n Requires coordination n Requires coordination
among a few people among many people
Ch 7 -3
Nature of Strategy Implementation
Management Perspectives
n Shift in responsibility
Divisional or
Strategists Functional
Managers
Ch 7 -4
Management Issues Central to
Strategy Implementation
n Establish annual n Match managers to strategy
objectives n Develop a strategy-
n Devise policies supportive culture
n Allocate resources n Adapt production/operations
n Alter existing processes
organizational structure n Develop an effective human
n Restructure & reengineer resources function
n Revise reward & incentive n Downsize & furlough as
plans needed
n Minimize resistance to n Link performance & pay to
change strategies
Ch 7 -5
Purpose of Annual Objectives
nBasis for resource allocation
nMechanism for management evaluation
nMajor instrument for monitoring progress
toward achieving long-term objectives
nEstablishpriorities (organizational, divisional,
and departmental)
Ch 7 -6
Annual Objectives
n Horizontal consistency of objectives
n Vertical consistency of objectives
Ch 7 -7
Policies
n Policies set boundaries, constraints,
and limits on the kinds of
administrative actions that can be
taken to reward and sanction
behavior
Ch 7 -8
Resource Allocation
Four Types of Resources
1. Financial resources
2. Physical resources
3. Human resources
4. Technological resources
Ch 7 -9
Managing Conflict
n Conflict not always “bad”
n Lack of conflict may signal apathy
n Can energize opposing groups to action
n May help managers identify problems
Ch 7 -10
Managing Conflict
n Approaches for managing and resolving
conflict
q Avoidance
q Defusion
q Confrontation
Ch 7 -11
Matching Structure with Strategy
n Structure dictates how objectives
and policies will be established
n Structure dictates how resources
will be allocated
n Changes in strategy often lead to
changes in organizational structure
Ch 7 -12
Basic Forms of Structure
n Functional Structure
n Divisional Structure
n Strategic Business Unit Structure
(SBU)
n Matrix Structure
Ch 7 -13
Functional Structure
n Group tasks and activities by
business function
Ch 7 -14
Functional Structure
Ch 7 -15
Divisional Structure
n Canbe organized in one of four
ways:
q By geographic area
q By product or service
q By customer
q By process
Ch 7 -16
Divisional Structure
Ch 7 -17
Strategic Business Unit Structure
(SBU)
n Group similar divisions into
strategic business units and
delegate authority and
responsibility for each unit to a
senior executive who reports
directly to the chief executive
officer
Ch 7 -18
Matrix Structure
n The most complex of all designs
because it depends upon both
vertical and horizontal flows of
authority and communication
Ch 7 -19
Restructuring, Reengineering, and
E-engineering
nRestructuring is called
qDownsizing
qRightsizing
qDelayering
Ch 7 -20
Restructuring, Reengineering, and
E-engineering
nCornerstones of Reengineering
qDecentralization
qReciprocal interdependence
qInformation sharing
Ch 7 -21
Managing Resistance to Change
n Force change strategy
n Educative change strategy
n Rational or self-interest change
strategy
Ch 7 -22
Creating a Strategy-Supportive Culture
1. Formal statements of organizational
philosophy
2. Design of physical spaces
3. Deliberate role modeling, teaching,
and coaching
4. Explicit reward and status system
5. Stories, legends, myths, and parables
Ch 7 -23
Creating a Strategy-Supportive Culture
6. What leaders pay attention to
7. Leader reactions to critical incidents and
crises
8. Organizational design and structure
9. Organizational systems and procedures
10. Criteria for recruitment, selection,
promotion, leveling off, retirement, and
“excommunication” of people
Ch 7 -24
